U.S. Consumer Sentiment Index Falls to 46.3 in October

The University of Michigan preliminary October consumer sentiment index fell to 46.3 from 48.1 in September, the lowest since May and 13.6% below the same month last year. Director Joanne Hsu said frustration over cost-of-living continues to mount, as consumers across the political spectrum believe the trajectory of the economy has weakened since the beginning of the year. She said buying conditions for durables plummeted amid high prices and borrowing costs, increases in sentiment among Democrats and Republicans were offset by a decline among independents, and sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply. Year-ahead inflation expectations rose to 4.7% from 4.6%, and long-run expectations to 3.5% from 3.4%. Hsu said the year-ahead reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings, and long-run expectations are notably higher than their 2024 range of 2.8% to 3.2%. Reports cited different missed forecasts of 47.3 and 47.6. Coverage also notes U.S. national debt above $40 trillion, a 10-year Treasury yield that risks reaching 6% for the first time since 2000, a 30-year fixed mortgage rate at 7.4% per Freddie Mac, and New York Fed 12-month inflation expectations at 3.9%.